Skip to content

When is a ‘Temporary Fix’ Not So Temporary? The answer depends on what they’re testing for….

July 14, 2010

Here we all sit with bated breath, waiting to find out if the latest miracle cure for the gaping wound at the bottom of the Gulf of Mexico will finally succeed in stopping the fountain of oil & gas that has been spewing forth from the bowels of the earth for the past 81 days.  I use the term “miracle cure” deliberately – until less than a week ago, there was no public reporting whatsoever that the genies over there at BP had come up with this magic cap which seems to be about to save the day. Bear in mind that creating a piece of equipment like this is a major undertaking, and with the bashing that BP has taken in the press for the last nearly 3 months, you don’t have to be a PR whiz to know that it would have made sense for them to at least put it out there that they were working on an improved version. But they didn’t…it just showed up one day.

I smell a rat. An oil-soaked rat

Take a look at the evolution of the industrial city which extends from the broken well head to the surface surrounding the site, and you see many of the elements of a production well. According to the NYT, BP is also planning on four production vessels “collecting oil” on the surface in the next few days. So we should ask ourselves – what happens if the integrity test shows that the well is intact, and the new “containment cap” – which seems to have exactly the same capabilities as a production wellhead – works perfectly? Why wouldn’t BP seek to recover some of its losses by doing what it knows how to do – producing and selling oil?

I don’t generally try to predict the future, but here’s what I see: the cap works. Wonderfully. The public is relieved, and our Gulf Coast neighbors – and the parrots in the national media – starting talking about “the miracle” represented by the fact that there are no normally-deeply-buried substances spluging into the ecosystem.  Bobby Jindal, Haley Barbour and the rest of the slow-talking/slow-thinking set starts demanding that the Federal Government stop “interfering with our livelihoods” by preventing free-market forces from restoring the natural order of things. BP finishes the relief well and trots out a bunch of experts who say that as long as it’s in place, there’s no harm in not finishing it with cement (as long as that process is at the ready). The New Right trots out a bunch of economists and ‘policy experts’ who solemnly intone that in times of falling tax revenues and economic crises, we’d be crazy not to go for the ducats. And that doing-so restores BP to financial health, and thereby secures the resources necessary to fund the clean-up. BP rolls out a plan to replace this temporary cap with a permanent production platform. Business-as-usual resumes. As usual.

The integrity test is the smoking gun. There’s absolutely no need to run an integrity test if all they’re going to do is pump the oil up to the surface. Zero. Nada. Zilch. In fact, according to a BP technician who would only speak anonymously, the test actually poses a risk – that oil has been flowing more or less unimpeded since the explosion. Putting the well bore and the attached plumbing under pressure could cause something else to rupture. In the words of the unnamed technician: “It’s just not worth the risk.”

One interpretation of the delay in the integrity test is that there’s an internal battle going on over running it at all; maybe the good guys (Thad Allen is said to be one) are hip to the scam and are pushing back. Of course, given that they’ve been pretty easy push-overs in so many ways so far, we hardly have reason to believe that they’d stand up even if they did realize what was happening.

How does this story end? If I could find somewhere to place a bet, I’d take even odds that Obama rolls over like a fat hooker on a Saturday night, and another “good crisis” passes without a real lesson having been learned (that is, if BP gets to keep the oil after all, why shouldn’t they think that even if they do screw up royally, they can still finance the fallout with the product).

And guess who gets to sleep on the wet spot…?

9 Comments leave one →
  1. July 14, 2010 4:32 pm

    You note: [. . . no harm in not finishing it with cement . . .]

    Well of course! Because filling that well with cement would cut off the oil, and – quelle horror – it couldn’t flow into the supply chain where they can sell it.

    That’s a hell of a scenario you’ve outlined. Welcome back.

  2. The Center Square permalink
    July 15, 2010 6:01 pm

    I’m not completely following you on this. Are you concerned that this fix is likely to be another shortcut that will soon fail, oil again gushing from the hole — all because of BP’s haste to get back to the revenue-producing side of the business? Or that BP should not, on principle, reap the reward of this asset because of its malfeasance?

    • July 15, 2010 6:33 pm

      Not a shortcut, but a highly-dubious gamble that only makes sense if the motivation is to rehabilitate the well.

      First the facts:

      1) There’s no need to stress-test the well if all they want to do is install a better cap and capture the oil until they can finish the relief well and seal it off from beneath (which is the announced “official” plan).

      2) The stress-test poses a risk of causing weakened elements of the well infrastructure to give way. Experts have compared it to filling a hose of unknown integrity with water under pressure. This risk is exacerbated by the fact that the amount of pressure is itself unknown (this is a mathematical corollary to the fact that they don’t know the exact amount of petroleum effluvia that is currently escaping; the two values are directly proportional). So you have an unknown pressure and an unknown tolerance for pressure. Bad mojo.

      Taken together, these two facts are the moral equivalent of holding an AA meeting full of lonely bachelors next to a really popular bar on ‘ladies-drink-for-a dollar-night’. You can’t be sure something’s going to go wrong, but why the hell risk it?

      Fact #3: If the stress test does damage elements that are upstream of the new cap, they’ll capture less oil between now and when the relief well is finished than they would have if they hadn’t damaged them. They’ll still probably capture most of it (depending on how severe the damage is), but they’ll still be able to say that they improved things. So in that regard, doing the stress test is playing with house money.

      Now the hypothesis: BP isn’t stupid. Reckless (possibly criminally so) but not stupid. They wouldn’t spend all that money on a sophisticated cap two weeks before the relief well was scheduled to be in place, and (more importantly) they wouldn’t stress-test the well if there wasn’t some serious upside. A major WIFM (the logical corollary of fact #3 is that when playing with house money, you make big bets).

      All of this leads to my belief is that BP is once again taking unnecessary risks with other people’s property (the Gulf) in pursuit of economic gain. Obviously, they can’t say that. But fortunately for them, what they can do is something of a Trojan Horse strategy — sneak the stress-test in under cover of installing the cap, and if they get lucky and have a serviceable well, play the Good-ol’-boys-just-trying-to-make-a-living vs. that-“African*”-in-The-White-House politics to engineer an ‘oil’s well that ends with a well’ strategy.

      So, while I agree what BP shouldn’t reap rewards for its malfeasance (the concept of justice is quaint, I know, but I guess I’m just an old-fashioned kind of guy), what I’m really commenting on is the venality of being willing to take even more risks — and in an underhanded manner — to capture the upside. And the fact that if their gamble pays off they’ll have Obama’s nuts in a vise, reinforce the ability of large companies to bitch-slap good public policy by playing the jobs card, and continue the process of undermining our ability to make rational trades between short-term gains and long-term good stewardship of our nation. And, y’,know…that kind of bugs me.

      *”African” being a product of verbal filters, of course.

  3. The Center Square permalink
    July 15, 2010 6:54 pm

    Maybe so. I could see them wanting to shave two weeks of gushing oil off their clean up bill (to explain why they’d try the expensive cap), and I could see them wanting to assess whether the cap is one PSI away from blowing off (to explain the stress testing). But I defer; you have read more carefully and thought more deeply about this one piece of the story than I have.

  4. July 19, 2010 11:53 pm

    I think the scenario you laid out will mostly happen. I was thinking the same thing that where the solution came from when, for the past many weeks, the media was saying their is no solution and that the last shot is to implode Nuke.

    I share that smell of an oil soaked rat.

  5. August 5, 2010 1:24 pm

    Hey Adam – so you’ve gone fishing again. Be sure to come back, okay?


  1. A friend returns « Whatever Works

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: